The Three-Rivers Headwater Region (TRHR) is the headwater of the Yangtze River Basin (YARB), Yellow River Basin (YRB), and Lancang River Basin (LRB); it is known as China’s ‘Water Tower’ owing to its important supply of freshwater. In order to assess ecosystem changes in the TRHR during 2000–2012, we systematically and comprehensively evaluated a combination of model simulation results and actual observational data. The results showed the following: (1) Ecosystem pattern was relatively stable during 2000–2010, with a slight decrease in farmland and desert areas, and a slight increase in grassland and wetland/water-body areas. (2) A warmer and wetter climate, and ecological engineering, caused the vegetation cover and productivity to significantly improve. (3) Precipitation was the main controlling factor for streamflow. A significant increase in precipitation during 2000–2012 resulted in an obvious increase in annual and seasonal streamflow. Glacier melting also contributed to the streamflow increase. (4) The total amount of soil conservation increased slightly from 2000 to 2012. The increase in precipitation caused rainfall erosivity to increase, which enhanced the intensity of soil erosion. The decrease in wind speed decreased wind erosion and the frequency of sandstorms. (5) The overall habitat quality in the TRHR was stable between 2000 and 2010, and the spatial pattern exhibited obvious heterogeneity. In some counties that included nature reserves, habitat quality was slightly higher in 2010 than in 2000, which reflected the effectiveness of the ecological restoration. Overall, the aforementioned ecosystem changes are the combined results of ecological restoration and climate change, and they are likely a local and temporary improvement, rather than a comprehensive and fundamental change. Therefore, more investments and efforts are needed to preserve natural ecosystems.